Section 176 of CA 2013 : Section 176: Defects In Appointment Of Directors Not To Invalidate Actions Taken

Explanation using Example

Imagine a scenario where Mr. Sharma has been acting as a director of XYZ Pvt. Ltd. He participated in board meetings and made decisions regarding the company's new marketing strategy. Later, it was discovered that Mr. Sharma's appointment was invalid due to a procedural error during his election. According to Section 176 of The Companies Act, 2013, all the acts done by Mr. Sharma before the discovery of the invalidity of his appointment would still be considered valid. This means the marketing strategy decisions he was involved in would remain effective. However, once the company became aware of the invalidity, any subsequent acts or decisions made by Mr. Sharma would not be protected under this section and thus, would be invalid.